Cloud-based servers and storage: what do you recommend and why?

wikipedia gives a great definition of cloud computing calling it an internet based paradigm shift of the old mainframe time-share days.

If you have data and applications that can live on the internet, go for it. A better way to put this is if are in no big hurry get your data or get a response from your application (like clicking something with the mouse and getting some sort of acknowledgement from the application) then cloud computing is for you.
I have been designing Client/Server systems (ie network based) since 1985.
Running interactive applications over a network do not work well unless you have a private network dedicated to that task. The ratio of best case versus worst case network response times can be 1:1000.
A good utilization of cloud storage might be a graphics design shop that stores large graphics files on the cloud & initiates the download of the data needed for the next day's work the night before.
Looks like I have portrayed cloud computing as a niche application versus others saying everybody should use it for everything.

Nothing ever works as good as the Sales Brochure says

I agree with Mr. Herps. An iSCSI SAN utlitizing SAS (or SATA for even lower cost) is the most cost effective solution that provides very good performance. While it may not compete in I/O performance when compared to fiber channel it also has a lower cost of entry and is very easy to implement. That solution can benefit from a dedicated network as well.

Guys, these answers are really helpful, but they aren't quite what I meant to ask about here, so let me try a modification...

I "get" the various characteristics and advantages of iSCSI and Fiber Channel for SANs, but what I REALLY want to know is how the various cloud-based, on-demand server and storage offerings from the vendors mentioned in my original question compare and contrast. For that matter, do cloud-based, on-demand storage services compete effectively with iSCSI, Fiber Channel and other SAN technologies in terms of performance, cost and/or availability? Are there times when cloud-based, on-demand server and/or storage services make good complements to SANs? Looking forward to more discussion -- thanks for the thoughtful responses so far!

If I understand your question, Michael, you are trying to gauge the benefit of one service against others as well as against (or compliment to) an in-house solution?

From my stand point, as someone who would research, purchase and implement an in- house SAN solution, as someone who enjoys working with hardware, as someone who has made that a part of my career path, I would rather utilize an in-house solution as opposed to outsourcing a cloud.

However, there are situation (organizations) that may not have a need for a Tech like myself so to offload the responsibilities to an outside organization does make some sense. But then other factors come into play, such as your network connection to the outsourced company, the level of support they provide and the apps that you can outsource (email, backups).

How do you measure the ROI when engaging an outside solution? What will you eliminate in the home office (hardware/software) as you move the apps out? Are you trying to solve a specific issue or is this due to growth? Who will liaison between you and the vendor?

I hope this helps in some way.